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The Top Stocks To Buy On A Crash


  • Growing volatility creates opportunities in the best stocks and sectors.
  • Healthcare and technology remain top sectors to buy.
  • Here are the best stocks to buy in every industry.
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Last week, I wrote how risk of a 5% pullback was rising, and this week, uncertainty remains high enough to suggest selling rallies in sectors with demand headwinds so that cash can be used to buy better businesses where demand tailwinds are strongest.

My caution stemmed from a surge in our overbought indicator, which gauges optimism and fear by calculating the percentage of institutional-quality stocks in our universe trading 5% or more above the 200-day moving average (DMA). In January, 55% of our universe was 5% or more above its 200 DMA, prompting us to warn of weakness, and then, a 2% reading in March alerted us to risk/reward significantly favoring buyers.

In discussing this indicator on May 22, I wrote,

"If we get above 30%, I'll begin recommending selling broken businesses, and if we get above 40%, then I'll start recommending selling rallies to reduce margin exposure."

That's what's happened. Last week's reading near 30% was the first neutral risk/reward reading since March, and earlier this week, we told members a reading near 40% meant it was time to play defense.

Source: Top Stocks for Tomorrow.

To be clear, readings can linger above 40%, but that doesn't mean we should be pressing bets by maxing out margin or buying stocks with impaired business models. Instead, upgrading portfolios with high-quality companies on down days makes the most sense.

And there should be plenty of volatility to allow you to proactively plan entries and exits. There's plenty of cash on the sidelines, supporting the notion investors will buy the best stocks on sale, but there's also plenty of question marks, suggesting caution is warranted. COVID-19 cases are climbing, global gross domestic product estimates are likely to be cut when the IMF meets on June 24, and permanent job loss

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This article was written by

Limelight Alpha Management Partners is a team of analysts powered by E.B. Capital Markets, a sell-side independent research firm that's been helping institutional managers at some of the largest funds since 2003. They use a quantitative ranking system that blends fundamental, technical, and seasonal data to rank sectors and industries weekly. They also rank over 1,600 institutional quality stocks weekly, highlighting the best and worst scoring ideas in our ADR, large cap, mid cap, and small cap reports.

They lead the investing group Top Stocks for Tomorrow where they provide systematic market cap, sector, industry, and individual stock idea generation. Members also receive a best stocks by sector report, highlighting top stocks across all market caps, and our best dividend stocks report. Learn More.

Analyst’s Disclosure: I am/we are long NOW, MA, NKE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (47)

Antiochus profile picture
Why Everquote? It doesn’t have a large moat, it has a low P/S and high gross margin because its marketing spend is enormous. Consider market spend as Cost of Revenue and it looks much more in line with valuations of other cloud tech companies. Thing is, it doesn’t have the same moat as those other ones...
Although I'd quibble on a few of them, this is a good (but hardly exhaustive) list of good stocks. My experience with the volatility of the past few years is that buy-and-hold is the only way to go. Yes, get the best prices you can on the best stocks you can find. Then . . . never sell. This is esp. true of dividend-growth stocks. Treat your stocks like the house you live in.
GameBuzz profile picture
I like and appreciate the lists. But if you want to buy them on a “crash” (your word), you’ll need a TARDIS to take you back to March!
Best of continued success!
LazyGringo profile picture
My "safe" plays are the telcos VZ and T, CSCO, AAPL and VIAC though anything can go down, these are all solid investments at this price and. except for aapl pay large dividends for you to wait. I would also buy more of each on 5% dips. During that insane 1500 point rally I cleared $600,000 in cash to use in case of another test of the March lows, or anything close to it, In that case I would buy AAPL first and then maybe a few fliers like airlines for the longer term. One thing about medic al stocks is that people are now afraid to go to the hospital because of risk of being infected. They are putting off elective surgery and trying to get healthy plus many patients with conditions see doctors now via webcam, and many will let their insurance go if they go broke enough so beware the flipside of the get-well trade. Notice my stocks all have to do with internet use, which is the one thing that has really increased recently including T and VIAC as my cheap netflix trades. That is major league streaming video that is barely priced into the stocks.
Sourdough98 profile picture
The "cash on the sidelines" expression annoys me. There is no cash in a market as leveraged as this one. This so-called cash will be used in margin calls and a rush to pay down real estate as it craters and other debt or face default. As for me, I'm waiting for the S&P to go below $1,500 to buy some rock solid blue chip dividend aristocrats like PG, PEP, MDT, JNJ, ADP, APD, WMT. Maybe I'll buy some RE at half off. Shouldn't be too long now. 2021?
ripoll profile picture
15 Jun. 2020
Please watch today: $ DOYU, $ WDAY and $ TAL.
I will shorten this list
two stocks you should buy in a crash
vix/tvix CBOE Volatility
TLT iShares Barclays 20+ Yr Treas.Bond

Short Planet Fitness
Some good companies in the list-- but too expensive. Any prices > Oct' 19 are a nono in the current environment imho.
Just let the markets crash again... then buy. Everything is high and a double top is being put in. Buyer beware...
ripoll profile picture
14 Jun. 2020
B "H
Taking advantage of the Sunday rest in Argentina, after having passed Shabbat properly in my home, with social distance by Covid 19; I have taken the trouble to analyze this HUGE and endless recommended list ..., the only interesting thing I found, from my experience and analysis are: ASH, FMC, V, ICE, MA, PEN, UNH, CHDN and NRG, the REST PUBLISHED has already made its journey ..., in addition, most of the companies recommended by the author, are of very low capitalization and volume.
Gee, thanks for narrowing it down
EyeBelieve profile picture
There's relative safety in healthcare, tech and utilities, but I'm not sure about your specific stock recommendations. Need more due diligence than a short article can provide!
The higher the score the better the buy from capital appreciation perspective?
johnsoriaknows profile picture
As coronavirus seem to be entering a second wave (mentioned in this article), COVID-19 plays will take center stage again.

Trinity Biotech (NASDAQ:TRIB) has been inching up steadily desptite a helter skelter market because the company expects to get FDA clearance for its COVID-19 Elisa antibody tests which will be followed by its 12-minute padid autoimmune tests per CEO comments during the 1Q 2020 , May 27, 2020 conference call.

Ironically, oncology companies Cyclacel (CYCC), BiolineRx (BLRX), and Verastem (VSTM) are all working on an angle to use their oncology candidates in early stages of the disease with the goal of reducing lung damage that would minimize the need for inhalator use. All three companie are well-funded and have several oncology milestones for 2H 2020 and beyond - CYCC and BLRX have small floats with CYCC having less than 4M shares on the float.

Here is a discussion on TRIB, CYCC, BLRX, and VSTM, for those curious about them:


You might want to check out Protalix (non-COVID stock) a few weeks from having the FDA approve the company's BLA filing about its Fabry drug candidate with a 90%+ probability of being approved. This would be the second FDA-approved for this company with strong balance sheet and othet important assets in 2nd Phase (Cystic Fibrosis and Ulcerative Colitis, and others in the pipeline).

Good luck!!
ENG is The Top Stock To Buy On A Crash

1. ENG is profitable (Q1 2020).

2. May 7, 2020: CEO ENG William A. Coskey, P.E. said, "the company will continue to focus on building industry alliances and thus securing more of these targeted projects, most of which are estimated to have revenue value of between $10 to $250 million each." (May 7, 2020).

3. June 9, 2020: The CEO ENG said he expects to announce further news on the company's progress relating to modular project proposals "in the near future." Targeted projects ENG are estimated to have revenue value of between $10 to $250 million each.
Thanks for posting. I went to the link and reviewed the scoring systems methodology, but I'm still left with a question. I know that not all the stocks that make your list pay a dividend, but does you screen exclude corporations with a recent dividend cut or suspension? Part of why I'm asking is CSGP is listed as a REIT, but does not actually appear to be and does not pay a dividend.
Deja Vu profile picture
The minute you recommended Herbalife, this article lost all credibility....
Darren McCammon profile picture
There are firms which are going to do well regardless of whether we go into COVID shutdown 2.0 or not, namely those which process and move natural gas from here to there:
Natural Gas Provides A Place To Ride Out The Storm: Williams And MPLX
Limelight Alpha Management Partners profile picture
I agree that there is a supply argument supporting natural gas prices, but I do wonder if declining associated gas production and economic weakness will negatively impact pipeline volume. Currently, MPLX is neutral rated and WMB is high-neutral rated in our scoring system. It will be interesting to see what happens from here.
Not familiar with Williams are they an MLP? The one thing thats kept me away from Natural Gas pipelines is it seems theyre about all MLPs except Kinder-Morgan and the extra tax complexity is not something I'd be super eager to get into
Wayyyyy....... not enough info here to say all these are good buys.
Limelight Alpha Management Partners profile picture
Thanks for reading and commenting. Our research is designed to be an idea generation machine. It's a great starting point for ideas, but every investor needs to to their due diligence. These stocks have characteristics that can lead to excess, but that doesn't mean that every stock is right for every individual's situation.
cccraig20 profile picture
MortyLong profile picture
Honesty how refreshing please refine w/top 5 & reasons please otherwise just JUST list $AMZN W/no reasons to buy just a list w/no value add. Please don’t publish & waste our time. This is where people decide to add/follow or list you as so many w/no reason to ever look back at you again, take every communication as equally useless & I know that’s harsh but you get 2 more chances to be of use to the SA community. I can make a list, my recommendation is $PPD as BUY for months w/PT $35, add WDAY PT $175. WORK PT $20 Healthcare: BMY, NVTA 
BCRX $4.50 hold for HAE primary BUY opportunity hold for as long as possible, BMY buy on dips below $60 will soar off of CELG pipeline & nice yield hold will hit & $85+ Biggest regret let outside noise break my resolve sold 450 shares st nice price & profit from $22.90/pps to $55, 4 calls bought all deep ITM $50, $52.50, $51, $52.50 hit $82.50 listened to the “noise” ignored my gut had COVID19. Made nice $ but not goal to sell Israel buying MRNA COVID-19 vaccine trust YOUR gut or someone whose consistent. BUYS $PPD PT $35, will add any questions send my way will try to help you. Limit losses built on strict stops strong buys: $AVEO $7$7.50 bd patient BCRX below $5, RIOT cost basis $.90 hold for “halvening period” read about blockchain & hold RIOT good pick. CBAY $6 or less, $BEAT will update ASAP.
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